Recently, The Chicago Reporter completed an investigation into the practice of Chicago landlords of accepting taxpayer-funded Housing Choice Vouchers, also known as Section 8, for rent of 1,550 properties currently in foreclosure proceedings. According to an article discussing the investigation, since 2008, banks have repossessed over 2,400 properties that were occupied by Section 8 recipients before being sold in foreclosure auctions.
The Chicago Housing Authority (“CHA”), screens landlords when they apply to participate in the voucher program, but, after the initial review, the CHA has no involvement in determining whether Section 8 properties have fallen into foreclosure. According to Ellen Sahli, CHA’s chief housing officer, the organization isn’t notified when properties fall into foreclosure, and, although efforts are being made to fix this problem, currently, the onus of determining whether a rental property is in foreclosure falls entirely on the tenant. Further, unless a property fails a CHA inspection, the landlord can collect rent on a property in foreclosure proceedings with additional scrutiny.
Chicago is fighting a losing battle with an ever-increasing number foreclosures. According to a study by the Lawyers’ Committee for Better Housing, from 2009 to 2011, more than 50,000 rental units went into foreclosure in Chicago, comprising nine percent of Chicago’s entire rental housing.
As this blog has discussed before, several new measures have been passed by the Chicago City Council and the State of Illinois in an effort to protect renters from these foreclosures. In 2011, the City Council adopted the Vacant Building Ordinance requiring owners of vacant buildings to promptly register them upon becoming vacant, pay a $500 registration fee, and maintain the property to certain standards.
More recently, in June, the City Council approved the “Keep Chicago Renting” measure, which requires any individual or institution attempting to foreclosure on real estate to provide tenants the opportunity to enter into a rent-controlled lease the property is sold or, in the alternative, pay the renter a “relocation assistance” fee of $10,600. In August, Governor Pat Quinn approved a bill amending the Illinois Mortgage Foreclosure Act to require individuals acquiring foreclosed residential property to honor existing leases or provide tenants sufficient time to move.
Tamiko Holt, President of the Housing Choice Voucher Residents Advisory Council, has criticized the CHA’s failure to investigate and put a stop to landlord’s practice of renting properties in foreclosure to CHA voucher recipients. According to Holt, “If they [CHA] did that, then tenants wouldn’t [be] faced with, ‘Oh, I’ve only been here three or four months. Now I’ve got to go because this property was going into foreclosure.”
It would appear from The Chicago Reporter’s investigation that, despite these efforts to curb the negative effects of foreclosures on renters, some unscrupulous landlords have found a way to bilk the City out of taxpayer dollars. If you have questions regarding the rights and obligations you have as a tenant or believe you have been the victim of the unfair practices of a landlord, contact the experienced real estate attorneys at The Slater Firm, Ltd. today.